T-Mobile Merger Approval Violated Every Last One Of the DOJ's Updated 'Antitrust Principles'

from the do-what-I-say,-not-what-I-do dept

Earlier this month, the Department of Justice issued a new, "modernized" merger remedies manual that's supposed to dictate agency behavior as it ponders approving, denying, or applying conditions to major U.S mergers. Superficially, many of the changes outlined in the document make perfect sense. For example, the new breakdown dictates that any merger remedies (including blocking deals outright) should do most of the things you'd expect, such as preserving competition:

  • Remedies must preserve competition.
  • Remedies should not create ongoing government regulation of the market.
  • Temporary relief should not be used to remedy persistent competitive harm.
  • The remedy should preserve competition, not protect competitors.
  • The risk of a failed remedy should fall on the merging parties, not on consumers.
  • The remedy must be enforceable.
  • In a statement, DOJ antitrust boss Makan Delrahim crowed about how the new guidelines would result in more consistent, transparent antitrust review:

    "The modernized Merger Remedies Manual reflects our renewed focus on enforcing obligations in consent decrees and reaffirms the Division’s commitment to effective structural relief,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “It will provide greater transparency and predictability regarding the Division’s approach to remedying a proposed merger’s competitive harm."

    The "funny" part? It was just a few months ago that the DOJ rubber stamped T-Mobile's $26 billion merger with Sprint, ignoring countless experts who clearly noted that the deal would not only erode competition, but raise rates, lower sector pay, and result in potentially tens of thousands of lost jobs (layoffs that are already well underway). Said approval violated every last DOJ guideline espoused above. Every, last, one.

    The DOJ proposed "remedy" for these problems was to try and shovel some spectrum off to Dish Network, which will spend seven years piggybacking on the T-Mobile network in the hopes of someday being a viable replacement fourth carrier for Sprint. It's a proposal that's not likely to work for a long list of reasons, the biggest being that the remaining three carriers (AT&T, Verizon, and T-Mobile) have a vested interest in ensuring the proposal never works to prevent real price competition. That and the fact that industry-cozy regulators like Ajit Pai, who crow endlessly about the need for "hands off" "oversight" of the telecom sector, will never effectively nanny the proposal to fruition or seriously penalize Dish or T-Mobile for flaking on their promises.

    Economists that pointed out the flaws in the deal in court found the DOJ's new guidance a bit entertaining:

    Again, blocking the T-Mobile merger was the most sensible, cleanest solution. Just like the last two times this kind of merger was attempted (AT&T/T-Mobile in 2011, Sprint/T-Mobile in 2014). But because T-Mobile kissed enough Trump ass to gain his political support, the Barr DOJ twisted itself into knots to ensure the deal was approved. Not only did the DOJ ignore all objective data showing the deal would clearly be terrible for customers, the market, and employees, Delrahim himself used his personal phone and email accounts to guide T-Mobile to deal approval and actively lobby U.S. regulators and lawmakers.

    That is, if you're new to this, the exact opposite of what an "antitrust enforcer" is supposed to do. The T-Mobile merger approval process was glorified cronyism disguised as serious adult policy making, and it placed the entire onus of remedy failure on the backs of sector employees and consumers. It was an embarrassment of corrupt, performative theater, and is important to remember as Bill Barr's DOJ shifts its antitrust attentions to one of the biggest enemies of the GOP and his friends in the telecom sector: Google.

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    Filed Under: antitrust, antitrust principles, competition, doj
    Companies: sprint, t-mobile


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    • icon
      Anonymous Anonymous Coward (profile), 10 Sep 2020 @ 7:23am

      How far do those commitments go?

      "The modernized Merger Remedies Manual reflects our renewed focus on enforcing obligations in consent decrees and reaffirms the Division’s commitment to effective structural relief,” ..."

      Does that 'focus on enforcing obligations' go to the extent of the DoJ accepting liability for failing to follow their own rules? Are they going to accept responsibility when their behavior differs from their 'supposed intention'? Will they use these 'modernized remedies' to go back and undo the (not mindless as there was an agenda being enacted) harms created by their lack of conformity to their own 'principles'?

      No. To all of the above. Which leads us to thinking about why we should take anything espoused by the DoJ seriously...that is until they use their 'non justice oriented powers' to drag us into court.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 10 Sep 2020 @ 7:31am

      Well, let's hope that they follow the manual going forward. It's my guess that whoever "modernized" it likely used the T-Mobile/Sprint merger as a template for what not to let happen in the future.

      reply to this | link to this | view in chronology ]

      • icon
        That One Guy (profile), 10 Sep 2020 @ 8:48am

        Re:

        Not a chance, the rules are just a PR stunt as I guarantee that they will apply them selectively and for political reasons, just like they did with the T-Mobile merger.

        reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 10 Sep 2020 @ 8:56am

      'We make the rules/laws, following them is for the peons.'

      Like many government agencies/individuals these days rules or even laws are treated as guidelines, optional guidelines to be exact, to be followed or ignored as desired.

      That they green-lit and even actively pushed a merger that violated every single rule they just put together is disgusting but not at all surprising, because after all rules are for the little people.

      reply to this | link to this | view in chronology ]

    • icon
      Another Kevin (profile), 10 Sep 2020 @ 9:20am

      Remedies must preserve competition.

      Remember that Pai has already expressed the opinion (for wired broadband) that there's competition in the market if you can switch to a different provider by moving to another city. You have to read all of these things with Pai's definitions of the words.

      reply to this | link to this | view in chronology ]

      • identicon
        Annonymouse, 10 Sep 2020 @ 1:47pm

        Re: Remedies must preserve competition.

        Move and pay flat rate for all communications?
        So who all is moving to the Baltic States?

        reply to this | link to this | view in chronology ]


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